Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1872.8 | -3.0 | -0.16% |
| Eurostoxx Index | 3145.6 | -25.7 | -0.81% |
| Oil (WTI) | 99.57 | 0.1 | 0.09% |
| LIBOR | 0.225 | 0.002 | 0.90% |
| US Dollar Index (DXY) | 79.08 | -0.402 | -0.51% |
| 10 Year Govt Bond Yield | 2.59% | -0.01% | |
| Current Coupon Ginnie Mae TBA | 106.1 | 0.0 | |
| Current Coupon Fannie Mae TBA | 105.1 | 0.1 | |
| BankRate 30 Year Fixed Rate Mortgage | 4.35 |
Markets are lower this morning on no real news. Bonds and MBS are up.
Interesting take on why interest rates are holding firm even in the face of stronger economic data. New rules intended to bolster pension funds may have just created $300 billion in extra demand over the next two years. Given that there are only $642 billion of 10 year + treasuries outstanding, this is a lot of incremental demand. This would partially explain why interest rates have largely shaken off the Fed’s tapering.
The latest Black Knight (formerly known as Lender Processing Services) mortgage monitor is out. Delinquencies and foreclosures continue to decline. As we have seen in other data, home price appreciation has been much higher in the non-judicial states than the judicial ones.
Mel Watt is due to speak on May 13, and he may signal a pause in reducing the government’s footprint in the mortgage market – a break from the policy of his predecessor, Ed DeMarco. Expect to see easier credit standards at Fannie, Freddie, and Ginnie. There is concern in government circles regarding affordability, especially for the first time homebuyer. Note that D.R. Horton emphasized the need for government intervention to help first time homebuyers.
The government came out with a study showing that global warming is currently costing the economy billions of dollars. This study was basically done at the WH’s behest, so take it with a grain of salt. obama will be trumpeting the study today in an effort to whip up the base for the 2014 midterms.
Filed under: Morning Report |
All Things in Moderation 
Now this I can get on board with since marriage is, in today’s age anyway, a suckers bet for men.
http://www.newrepublic.com/article/117528/monogamy-outdated-and-unattainable-ideal
Me and TNR, strange, er, bedfellows.
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Nah, if I had to start dating again, it would be bad. What do you mean, bad? Try to imagine all life as you know it stopping instantaneously and every molecule in your body exploding at the speed of light.
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That’s better’n gettin’ completely hosed in a divorce.
Really
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Typical woma…..
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This was rather honest about the author’s own perspective.
http://www.salon.com/2014/05/05/its_not_easy_being_black_on_saturday_night_live/
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Voters in Louisiana?
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What do our Progressives think the reason for this is?
http://m.washingtonexaminer.com/exography-irs-data-show-florida-texas-s.c.-are-strongest-tax-base-magnets/article/2548094
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Uh…
http://m.washingtonpost.com/politics/vulnerable-democratic-sen-kagan-runs-anti-obamacare-attack-ads-against-gop-contender/2014/05/05/40b8dce4-d38c-11e3-95d3-3bcd77cd4e11_story.html
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Awesome and funny!
https://twitter.com/AdamSerwer/status/463664194928521216
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The R Presidential primaries are going to be fascinating with Rand Paul and Ted Cruz in it.
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“That’s better’n gettin’ completely hosed in a divorce.”
My father in law remained shortly after this divorce from my wife’s mother, who died about 5 years ago.
He’s in the process of getting divorced. he seemed to avoid getting hosed by not having any assets.
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I’d argue this shows the cumulative effect of regulations.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/05/05/u-s-businesses-are-being-destroyed-faster-than-theyre-being-created/?tid=pm_pop
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Seemed to me to be the obvious result of the three years chosen: 2009, ’10, and ’11. I would bet the numbers are good for creation in ’13.
Taking a longer view, credit was looser for small biz when I was younger. Credit is what permits small biz to weather the brutal first year of operation and credit is what fuels expansion.
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Mark:
Seemed to me to be the obvious result of the three years chosen: 2009, ’10, and ’11.
They looked at data going back to 1978, not just those three years. Those three were just the worst, during which creation fell below destruction for the first time, but the trend seems pretty clear going all the way back. (Actually the share of firms dissolving seems pretty constant, between 8% and 10% throughout the 30+ years, while the share of new firms is what shows a consistent trend to the downside.) I’d also note that the recession officially ended in mid 2009, so it was during those 3 years the the economy was ostensibly growing.
It’s pretty difficult not to credit the ever-expanding regulatory state with being a significant drag on business creation. Especially O-care.
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Scott, my own involvement with business creation has been with the forming of new entitities over 45 years. I have literally been at or near the birth of hundreds of small businesses. These are the sorts of businesses that fail sooner, rather than later – if a business has reached public offering stage it is past that critical period. I have only been present at two public offerings. They come well after inception, in my world.
I have never seen the decision to open a small biz turn on a federal regulation. However, I have seen location turn on both regulation and local taxation and I have advised avoidance and optimization strategies.
From my experience, the perception of local need or demand fuels the plan to open a new business and the availability of capital determines the final decision to act. For example, I am involved in the formation of a new entity that will open a tox lab within 30 mi. of the Capitol building. Its prime mover is a biochem lab manager with a great track record who has attracted investors and who is pretty much assured of a substantial business for at least a year based on his long positive reputation in the local medical community which provides most of the samples. I expect this biz to gross between $3-4M in its first 12 months, on a total intial investment of about $400K. These people [including the two major outside investors] know the regs they must deal with and have checklists for dealing with them. Always the critical issues for success are the demand for the product or service, the availability of capital, and the abilities of the entrepreneurs.
The entrepreneurs must have the ability to deliver and the ability to manage. Small biz runs on tight margins. The great chef who snorts coke will run his establishment into the ground. The building contractor who cannot handle his subs is dead in the water. But shit happens and when you are on a tight margin to begin with and banks are not extending credit to small biz, as they were not around here until 2011, failures will outweigh successes.
I may be wrong, but I suspect these gross numbers are filled with small biz – dry cleaners, restaurants, convenience stores, computer repair shops, hair dressers, specialty building supplies, auto repair or body shops and the like, machine shops, junk yards, and myriad professional services and independent trades.
They all face regulations and I have never seen the regulations affect the decision whether or not to go into business. I have seen it affect timing within the limited frame of “where will EPA-zoning-subdivision restrictions-TCEQ-Water Board-TLC allow the placement of the junk yard”, “where will zoning-TABC allow the porn shop”, “where is it practical to place a new nightclub considering the Austin Noise Ordinance”, “how many curb cuts will the city allow for a parking lot here”, and so forth. Due diligence may take longer now, but not so long as to exceed the time frame for the acquisition of capital, from what I have seen, because that time frame has expanded, too.
The Tox lab is probably going to open its doors in Georgetown, TX, 28 mi.from the Capitol Building in Austin.
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Mark:
They all face regulations and I have never seen the regulations affect the decision whether or not to go into business.
Surely your experiences have a selection bias, by which I mean that you are talking to people precisely because they have already decided to go into business. People who have decided not to open a business, whether it is because of regulatory hassles or other reasons, would, I imagine, have no reason to come to you in the first place.
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People who have decided not to open a business, whether it is because of regulatory hassles or other reasons, would, I imagine, have no reason to come to you in the first place.
There has to be some truth in that, but we lawyers do see people who are in the early exploratory phase, as well. The ones I have seen back off mainly did so because either they proved to themselves that the market was not there, or they couldn’t get the investor or the lender to back them.
On a couple of occasions I have dissuaded recent heirs from blowing their money on business ventures for which they were unsuited and part of the unsuitablility was their unfamiliarity with the reg environment. Most of their unsuitability was lack of knowledge, expertise, or experience, generally.
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Mark:
It just seems highly intuitive and obvious to me that, all else being equal, increasing both the amount and stringency of regulations that must be navigated by business owners has to have the effect of reducing the marginal desire and ability of individuals to both start a new business and expand existing businesses. If you think that experience proves an increasing regulatory state does not have this effect, what phenomenon could possibly explain this counter intuitive experience? That is, why doesn’t a growing regulatory state inhibit business creation?
Also, is the 30 year down-trend in new business creation that jnc pointed to yesterday reflected in your experience?
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Mark, I also think there’s been a gradual build up of employee regulations that starts to have a cumulative effect, but to be fair most have an exemption for around 50 employees or less.
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Blow me.
Choke.On.It.
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It’s pretty difficult not to credit the ever-expanding regulatory state with being a significant drag on business creation. Especially O-care.
There are no costs to progressive policies, only benefits, bagger.
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Should be interesting. Looks like the 85% with employer provided insurance will have to pay more if the DC Council gets it’s way.
http://www.washingtonpost.com/local/dc-politics/dc-council-approves-broad-new-tax-on-insurance-to-cover-citys-health-care-exchange/2014/05/06/da3770bc-d51f-11e3-8a78-8fe50322a72c_story.html?hpid=z3
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In the spirit of McWing’s links and comments……………….WTF, Santorum supports an increase in Minimum Wage?
http://www.addictinginfo.org/2014/05/06/rick-santorum-minimum-wage/
I’m in a pissy mood as our son took off across the desert today with “my grandson” on his way to CO. I’m happy for the fam but sad for myself. Trenton (our grandson) and I did a workout together this morning to some really loud music. I taught him how to do planks and he taught me what he calls “the army man workout” (remember he’s only eight), and he also taught me how to make a roller coaster on “minecraft” with or without “lava”……OMG
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lms:
WTF, Santorum supports an increase in Minimum Wage?
It comes as no surprise to me that economic illiteracy and populist pandering exists in both parties.
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I have always said that increasing the minimum wage is good politics, but stupid economics.
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Mark, have you ever seen one cap their hiring or growth due to regulatory thresholds?
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I am guessing the largest local waste management site has been constrained, but I do not know it for certain.
http://www.texasdisposal.com/
Rosanne used to do work for them. We would go to their annual picnic. They built a game preserve and park around the disposal site and used the park to wow and woo legislators and county and city officials, as well as host charity events. As far as I could tell, they were state of the art and devoted to Christian values of stewardship, and in the long run it has helped their bottom line as well, compared with the “national” outfits. BFI, for example, has been the subject of much litigation and bad PR.
So I would say TDS’ whole business model is a combined result of the brothers’ religious views and real attention to the regulators.
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